The government's net borrowing through savings tools was 7.0 per cent more in financial year 2018-19 compared to that of the previous fiscal year (FY).
According to data from the state-run Department of National Savings (DNS), the net sales of savings tools in the July-June period amounted to Tk 499.39 billion, up from Tk 465.30 billion in the same period of FY 2017-18.
The net sales of savings schemes are almost double the government's original target of Tk 261.97 billion in the last fiscal.
Later, the government had lifted the target to Tk 450 billion for the last FY.
The higher borrowing also pushed up the government's payment of profit by almost a quarter.
The government spent Tk 248.96 billion on payment of profit on account of savings tools in the FY 2018-19, up from Tk200.01 billion in FY 2017-18, according to the Department data.
With the sales of savings tools picking up, the government has set a target for its net borrowing from the instruments to Tk 270 billion for FY 2019-20.
The sales of savings schemes have increased in recent years due to the higher yield rates compared to interest offered to bank clients investing in time deposit and poor-performing stock market.
But officials said the sales of instruments might fall in the current financial year due to a hike in source tax on yield gains.
The National Board of Revenue (NBR) has increased source tax on the gains to 10 per cent from 5.0-per cent on all types of state-run savings certificates in the current fiscal year.
But the savers will get 5.0 per cent rebate from source tax on their first Tk 500,000 of savings certificates. Besides, in case of purchasing pensioners' savings certificates, savers will get the full exemption from source tax on their first Tk 500,000.
The government sells four types of savings certificates with yield rates up to 11.76 per cent.
It also sells different types of bonds to resident as well as non-resident Bangladeshis.
An estimated 20 million people have investment in savings schemes.
© 2017 - All Rights with The Financial Express